Tuesday, July 22, 2008

The National Highway Traffic and Safety Administration has announced various recalls for some of the US market's segment-leading vehicles. 2008 Dodge Charger and Magnum as well as the 2008 Chrysler have a reported fault with the rear axle hub nuts, which may loosen causing the half-shaft to ...

Chinese supplier Guangdong Hongtu Tech has reportedly announced plans to supply engine brackets to Canadian company Vikeda Industries, for eventual use in Chrysler vehicles, reports Shanghai Securities News. The report did not reveal any details

7.22.1898James W. Packard is taken for a test ride in a Winton motor car by Alexander Winton7.22.1909The Dayton Engineering Laboratories Company is incorporated by Charles F. Kettering and Edward A. Deeds after receiving an order from Cadillac for 8,000 automobile ignition units - the name of the company, intentionally coined to allow the “Delco” acronym, was suggested by associate William A. Chryst7.22.1935K. T. Keller is elected President of the Chrysler Corporation succeeding founder Walter P. Chrysler who remained as Chairman of the Board7.22.1948The Willys-Overland Company introduces the Jeepster, a sporty variant of the standard Jeep designed by Brooks Stevens 7.22.1969Owen R. Skelton of the Chrysler Corporation dies in Palm Beach, FL at age 83

Monday, July 21, 2008

Ralph Gilles, chief designer on the 2009 Dodge Ram, and his team turned to aerodynamics to boost the pickup's mileage. An associate says Gilles has made aerodynamics a "religion" in Chrysler LLC's design department.

The truck, redesigned for 2009, emerged from more than 200 hours in a wind tunnel with a coefficient of drag of .419 for the Ram 1500 Crew Cab 4x4. That compares with a coefficient of .463 for the 2008 Ram Quad Cab 4x4. For some pickups, coefficient of drag can be 0.5 or higher.

Chrysler engineers also tweaked the Hemi engine's cylinder cutoff system so it operates in a wider rpm range, enabling the vehicle to run longer in four-cylinder mode.

"There's more torque in the four-cylinder mode," says Mike Cairns, Ram chief engineer. "So you're able to propel the vehicle in four-cylinder mode more often."

Also, compression is up, and the efficiency of air and fuel flowing through the engine has been improved. The Hemi added the fuel-saving feature of variable valve timing, which changes the time the valves open and close to let the engine run at peak efficiency.

Then the pickup went on a diet. Engineers cut out 80 pounds, which might not seem like much on a 6,700-pound vehicle. But the weight loss, engine tweaks and improved aerodynamics combined to achieve a 1 mpg improvement in fuel economy. That may seem paltry, but as Chrysler spokesman Bryan Zvibleman says, "We're fighting for every mile per gallon in this ultracompetitive segment."

Little changes add up, says Derrick Kuzak, Ford group vice president of global product development. He says he tells his team, "We need to treat every joule of energy in a vehicle like a precious commodity."

That means improving "every element of a vehicle, whether it's aero, rolling resistance, powertrain," driveline efficiency, or energy drains that don't move the vehicle, such as power windows or heated seats, he says.

Precision Automation and Robotics India (Pari), a robotics and automation company, has bagged a Chrysler deal to build the US car major's axle assembly plant and ship it to its Marysville axle unit in Michigan for installation in March 2009.

The US car maker is contemplating investing $ 700 million into the Marysville plant. This investment is part of Chrysler Group's $3 billion investment to produce more fuel-efficient engines, transmissions and axles. The axle assemble plant, which is a Rs 15 crore deal, will have adequate flexibility so that it can accommodate new platforms and enable the car company to add new axles of any size.

"It took us over 50 project executions in the US to convince the Chrysler Group to let us do this project," said Ranjit Date, president and joint managing director, Pari.

The Chrysler team was in India for two weeks visiting Pari and its customers in India, added Date.

Pari, a 16-year-old company with over 1,000 installations worldwide, had earlier worked with Caterpillar, American Axle, Emerson, Eaton, Honeywell and Dow Corning in the US.

It aims to be in the top ten league of global automation companies with a billion dollar turnover.

With Chrysler's orders, Pari expects this to open more doors. Successful execution of the project will put to rest the question on whether this type of project can be done using a global delivery model, he added. Pari's subsidiary in Detroit will do the front-end job while the project engineering manufacturing will take place at its Pune facility and the Automation City, near Pune.

“We are also talking to GM and Ford. I am sure we will have a chance to work together,” Date averred.

After the powertrain assembly, Pari also wants to set up an engine plant and body assembly units globally.

The US automotive industry has restructuring itself and is reinventing the small and fuel efficient car platforms. It is trying to do this at lower capital costs and with lower margins and this represents a major opportunity for Pari, added Date.

Many people may think that the U.S. auto slowdown is causing plant shutdowns only at U.S. plants, including the Toyota assembly plant in San Antonio, which will cease Tundra pickup production for three months starting Aug. 8.

But Mexico plants are being shut down temporarily, too. Chrysler closed all five of its Mexico plants, including the one near Saltillo, for two-week periods this month.

"Adjustments in production volumes" is part of the reason for the Mexico shutdowns, along with maintenance and preparations for 2009 models. Chrysler employs 6,000 Mexican workers. No layoffs are planned.

DETROIT, July 21 (Reuters) - Chrysler LLC could face a squeeze in cash as higher borrowing cost for its finance arm would make it more expensive for the struggling U.S. automaker to offer cheap loans and other discounts to buyers.

Chrysler Financial's $30 billion credit facility, used to finance the automaker's vehicle sales, is up for renewal in early August and the lender could could see its borrowing costs rise amid the continuing credit market turmoil, a source familiar with the situation told Reuters.

Higher borrowing cost for the lending arm means it would be more expensive for Chrysler to offer zero-percent loans and other rebates to consumers, increasing Chrysler's cash burn, said Kam Hon, a credit analyst at DBRS.

Chrysler and other automakers offer loans to consumers for vehicle purchases and lend money to dealers to finance their inventory through captive lending arms.

Chrysler Financial has a $70 billion portfolio comprising loans to consumers and dealers, spokesman Bill Porter said, adding that the company is still finalizing details of the credit facility's renewal and it was too early in the process to talk about any impact on the company.

Chrysler, pushing to turn around its operations nearly a year after being acquired by private equity firm Cerberus Capital Management LP, is currently offering zero percent financing for six years on some 2008 Dodge Ram pickup trucks. It also has thousands of dollars in cash incentives on many of its vehicles.

A Chrysler spokeswoman said on Monday the automaker will continue to offer competitive finance and lease offers for its customers and dealers.

Chrysler, which lost $1.6 billion in 2007, has said it ended the year with $9 billion in cash. Its U.S. sales are down 22 percent so far this year.

Liquidity concerns for Chrysler have been rising as evidence grows that the downturn in U.S. sales that began earlier this year has accelerated in the face of record gas prices and a consumer defection from trucks and SUVs.

Last month, Chrysler drew down a $2 billion credit line from Cerberus and Daimler AG, the German car maker that sold off a roughly 80 percent stake in Chrysler to Cerberus last year.

If U.S. industry volumes fail to recover, Chrysler could face a "liquidity event" around the second half of 2009, he said in a recent research note.

The automaker last month had to deny rumors it was facing a cash crunch. The company sent a letter to dealers earlier in July saying that reports of its financial distress were unfounded.

Chrysler is also closing a minivan plant and eliminating one shift at a Dodge Ram truck plant in Missouri due to weak demand.

Chrysler's troubles comes as larger rival General Motors Corp detailed plans last week to cut costs by $10 billion in a bid to shore up cash and survive a deep industry slump.

The world's largest auto market is reeling from an unprecedented combination of record gas prices, tighter credit and a housing market collapse.

U.S. auto sales this year are on track to plunge to near-decade lows. Automakers have abandoned hopes for a second-half recovery and some analysts are now saying investors will have to wait until 2010 for signs of a rebound.

Chrysler LLC may eliminate the highest trim levels of its Dodge Avenger and Chrysler Sebring sedans while adding more luxury amenities to the mid-level models of those vehicles, Bloomberg News reports. The revisions, part of a strategy called "Fight Back," mean less-expensive models would have standard features such as heated seats that are now offered only in costlier versions, according to a document sent to parts suppliers, Bloomberg reported on Thursday. The strategy may help sales of those sedans, two of Chrysler's more fuel-efficient cars. The Auburn Hills automaker's truck-heavy line up has caused sales to slump even worse than its rivals. Chrysler sales are down 22 percent so far this year, while the industry is off 10 percent, according to Autodata Corp.

DETROIT — When it was introduced in 2004, the brash-looking Chrysler 300 became an industry sensation. And just a year ago, Chrysler's Jeep brand couldn't make Wranglers fast enough.

But times have changed, and the two former stars have fallen on hard times.

"Wrangler is soft," says Stephen Kaiser, president of the Fairfield Auto Group in Muncy, Pa. "Usually we have a waiting list, but I have about seven in stock."

In the first half of 2008, sales of the 300 are down 36.5 percent to 40,014 units. The Wrangler is off 29.3 percent to 46,443.

Kaiser says used 300s still sell, but new versions of the rear-drive sedan aren't moving at all. "People just can't afford $30,000 to $40,000" for a new vehicle, he says.

One New York dealer who declined to be identified complains that Chrysler waited too long to refresh the 300's distinctive design. "The guy coming out of a lease doesn't want to buy the same car," he says.

Chrysler plans a redesigned version in 2010 for the 2011 model year.

Sales of the Wrangler skyrocketed when Jeep redesigned the vehicle for the 2007 model year. The difference? For the first time, Jeep offered a four-door model, the Wrangler Unlimited. Dealers had long been asking for a four-door.

Art Spinella, an analyst for CNW Marketing Research in Bandon, Ore., says customers usually buy Wranglers as a second or third household vehicle.

DETROIT — In a red-hot market for small cars, Chrysler is struggling to move its few reasonably fuel-efficient vehicles.

On July 3, Chrysler asked dealers to order their small vehicles five months in advance. Why? Before it adds a production shift at its Belvidere, Ill., assembly plant, Chrysler wants to know whether there's enough demand for the three compact vehicles built there: the Dodge Caliber, Jeep Compass and Jeep Patriot.

Enough demand? Rivals Ford, Toyota, General Motors, Honda and Nissan are running their assembly plants virtually around the clock to produce enough small cars to meet demand.

Chrysler's weak sales justify the company's caution. Sales of Chrysler's only small car, the Caliber, dropped 43.6 percent in June, while its platform-mate, the Compass crossover, fell 38.8 percent. The Patriot, another compact crossover on the same platform, enjoyed a June sales increase of 5.5 percent.

Overall sales of the three vehicles are up 18.3 percent this year. The numbers are skewed because the Patriot did not go on sale until March 2007; year-over-year combined sales for the Caliber and Compass are down 5.0 percent.

At the end of June, the Caliber had a 41-day supply, up from 20 days on June 1. Compass supply was 78 days, and Patriot supply was 48 days. The Ford Focus had a 39-day supply, while the Honda Civic had a 16-day supply.

Tough month

Sales for 2 of Chrysler LLC's 3 compacts plummeted last month.

June 2008 Sales

% change from year ago

Dodge Caliber

6,099

–43.6%

Jeep Patriot

4,889

5.50%

Jeep Compass

2,075

–38.8%

Weighing demand

Chrysler has boasted that its status as a privately held company allows it to react quickly to market conditions. But a memo this month to dealers suggests otherwise.

In the July 3 memo Chrysler said demand for the Belvidere plant products had "skyrocketed."

Chrysler asked dealers to "forecast sales and order through December production," adding, "With your help, we will ensure that we build as close to market demand as possible."

The five-month lead time is much longer than usual. Chrysler normally asks dealers to order 30 days in advance. Earlier this year the company asked dealers to order 60 days in advance for 2009 models.

In March, just as fuel prices began to soar, Chrysler killed the third shift at Belvidere. Chrysler is now running the plant on two shifts with overtime. A Chrysler spokesperson said Chrysler is monitoring sales but has made no decision about restoring a third shift.

Chrysler small-car blues

As customers rush to fuel-efficient small and mid-sized cars, Chrysler's small-vehicle lineup is struggling vs. its domestic competitors.

Segment

hwy. MPG*

transaction Price**

2nd-quarter sales (%)

Compact cars

Dodge Caliber

27

$17,257

–13.7

Chevy Cobalt

31

$14,751

21.5

Ford Focus

33

$15,885

30.7

Mid-sized cars

Chrysler Sebring

30

$22,955

–37.4

Dodge Avenger

30

$20,418

–35.5

Chevy Malibu

32

$22,260

47.8

Ford Fusion

28

$19,874

22.7

Crossovers

Jeep Patriot

27

$18,701

61.4

Jeep Compass

27

$19,935

–22.9

Saturn Vue

26

$23,247

3.4

Ford Escape

26

$21,872

–8.9

*EPA numbers for 2008 model year based on the smallest available 4-cylinder engine, automatic transmission and 2wd

Troy Allen, owner of Allen Motors Inc., a Chrysler, Dodge and Jeep dealership in Derry, N.H., that has been selling 30 to 40 new cars a month, says the problem is not availability.

"I can get all the Calibers, Compasses and Patriots I want," he says. "But people are not coming into the dealership looking for high gas mileage cars."

Because sales have been so heavily tilted toward trucks, "the exterior perception of Chrysler is not anything to do with small cars," Allen says.

Allen is not waiting for Chrysler to act. Last week he removed trucks from the front of his lot and replaced them with Chrysler's most fuel-efficient models.

Pen Fry, vice president of sales and operations at Jeff D'Ambrosio's Chrysler-Dodge-Jeep in Downingtown, Pa., is doing the same thing.

He is launching his own promotion called the Over 30 Club. Fry says he's lining up in front of the dealership and under a banner all Chrysler vehicles that get 30 mpg or better on the highway. The Chrysler Sebring and Dodge Avenger are the only Chrysler vehicles with that rating.

"Let's start pushing what sells, what the people want," he says. "I think it's time to stop pushing what we want them to buy."

Skimpy lineup

Chrysler is handcuffed by the product lineup it inherited from its previous owner, Daimler. Chrysler has contracted Nissan to build a subcompact based on the Versa. The car, expected to be called the Dodge Hornet, is scheduled to arrive in showrooms in 2010. Chrysler also is working with China's Chery Automobile on small cars, but no dates have been set for North American availability.

Meanwhile, in the midst of a major restructuring under the ownership of Cerberus Capital Management, Chrysler is trying to stick to its guns on slashing unprofitable fleet sales. Retail sales haven't compensated for the fleet cuts. Year to date, Chrysler has cut sales to fleets more than 20 percent, the company says. Chrysler does not divulge its fleet sales numbers.

Despite the cut in fleet sales this year through April, fleet sales still account for about 35 percent of total sales at Chrysler, according to an Automotive News analysis of data supplied by R.L. Polk & Co. last month.

To make money selling smaller vehicles, says Jim Arrigo, owner of Arrigo Dodge in West Palm Beach, Fla., and chairman of the Chrysler-Jeep national dealer council, Chrysler will have to rethink the way it operates.

"They've got to open up the ability to order as many as you want and order them the way you need them," Arrigo says. "There's not a lot of margin, so you've got to sell them in volume."

Jesse Toprak, an analyst at Edmunds.com, says Chrysler's new management team didn't inherit much of a portfolio for the huge leap into small cars: "It's a bit unfair. Chrysler three years from now will be nothing like the Chrysler we see today. They're dealing with what they've inherited. There's not much you can do with the existing product line."

Employees from 74 Chrysler Jeep(R) Superstores and Motor City Dodge Dealers partner with the Sterling Heights Community Foundation to build a safe, new playground - More than 40,000 children will benefit annually from the playground built at Delia Park in Sterling Heights, which was recently named as a Top 100 city by Best Life magazine in 2008 as one of the 'Best Places to Raise a Family'AUBURN HILLS, Mich., July 21 /PRNewswire/ -- More than 250 volunteers from the Chrysler Jeep(R) Superstores, Motor City Dodge Dealers, The Chrysler Foundation, the Sterling Heights Community Foundation, residents of the Sterling Heights community and organizers from KaBOOM! came together on Saturday, July 19, to build a new playground at Delia Park. The park is located in the city of Sterling Heights which was recently named among the top 100 cities that were named by Best Life magazine in 2008 as the "Best Places to Raise a Family." Designed by local children, the playground replaces existing equipment at the park that was outdated, in need of replacement and unsuitable for children to play on. The Chrysler Jeep Superstores and Motor City Dodge Dealers spearheaded the build effort that will provide 40,000 children annually with a new, safe place to play. "Every child deserves the joy of play and friendship in their lives; and every family deserves the support that a strong community network provides," said Jim Schebil, president of the Chrysler Jeep Superstores Advertising Association. "This project provides these things and more to the City of Sterling Heights and is directly in line with the Chrysler Jeep Superstores long history of strong hometown community involvement." Planning for the playground began at a Design Day event held in May 2008. Local children and community leaders met with organizers from KaBOOM! and Chrysler to develop their "dream" playground. The children's drawings were used to create the final playground design. "We are so excited to have this playground built at Delia Park with the help of KaBOOM!, Chrysler Jeep Superstores and Motor City Dodge Dealers," said Sterling Heights Mayor Richard Notte. "A playground represents what a park is all about. This playground says that Delia Park is a park that welcomes vibrant, energetic children ready to play on equipment created especially for them." The project is the seventh of 25 playgrounds scheduled to be built across the country this year by KaBOOM!, The Chrysler Foundation, Chrysler Financial and Chrysler, Jeep or Dodge dealerships. The playground is also one of more than 225 builds KaBOOM! will lead across the country in 2008, in an effort to provide an enjoyable place to play within walking distance of every child in America. "The Motor City Dodge Dealers are excited to support an effort that puts our children and community first," said Motor City Dodge Dealers President Mark Snethkamp. "Our stores have been vital members of the communities they serve for decades, so we understand that bringing people together in a positive and fun way is the basic building block needed to create strong communities."

7.21.1926Frederick John Mancheski of Echlin Inc. is born in Stevens Point, WI7.21.1936The 1934 DeSoto “Winged Goddess” mascot is patented by designer Herbert V. Henderson7.21.1949The first Jaguar XK120 released for public sale (serial #66002) is shipped to Sydney, NSW, Australia 7.21.1965Racer Jovy Marcelo is born in the Philippines7.21.1991Racer Paul Warwick is killed at age 22 when he crashes during the Gold Cup race at the Oulton Park circuit in England

John Herlitz packed a lot of memorable MOPAR into his 35 years with Chrysler. He graduated from college and started with the company as a designer in 1965. In just three years, Herlitz became manager of the Plymouth Intermediate Car Studio and didn't waste much time making his mark on the lineup.

Best known for his redesign of the 1970 Barracuda and 1971 GTX, Herlitz went on to work on several well-known concept cars, including the '97 Copperhead (above right).

Upon the announcement of Herlitz's retirement in 2001, Tom Gale, then executive vice president of Chrysler Product Development, said, "John Herlitz has made a tremendous contribution to DaimlerChrysler, and we will miss him personally and professionally. John's design signature has been seen on Chrysler branded vehicles from 1968. He has a true passion for cars and vehicle design that is unparalleled in the industry."

Featuring separate paint schemes, the first two Challenger Drag Race Package Cars built by Mopar will be revealed at approximately 2 p.m. MDT, following Sunday's Mile-High race eliminations and before the final rounds. Mopar, Chrysler LLC's original equipment parts manufacturer and distributor, announced its Challenger Drag Race Package Car at the 2007 Specialty Equipment Market Association (SEMA) Show in Oct. 2007.

The first drag-race-only, factory-prepped package car built in 40 years, the new Challenger Drag Race Package Car by Mopar builds on the heritage of the 1968 HEMI(R)-powered Dodge Darts and Plymouth Barracudas. The limited-edition '68 package cars represented a significant point in Mopar's history -- solidifying the brand as a quarter-mile force. A watershed moment in drag racing history, they were also a major milestone in the evolution of the second-generation HEMI powerplant (426 HEMI engine). Some of drag racing's biggest names drove the crowd-favorite '68 package cars -- like Ronnie Sox, "Dandy" Dick Landy and Jack Werst, just to name a few. Mopar's popular HEMI Challenge racing series, operated in conjunction with the National Hot Rod Association (NHRA), features these '68 package cars in quarter-mile competition all over the country today.

Based on the Challenger SRT8(R), Mopar's modern, factory-prepped Challenger Drag Race Package Car will begin with a special Body-in-White (BIW) from Chrysler's Brampton, Ontario, Canada assembly plant. It has been updated for modern racing conditions. Special weight-reduction modifications were made by eliminating unnecessary components and systems. To accentuate the weight savings, it will also feature added composite, polycarbonate and lightweight components designed for drag racing. The engine was repositioned and the wheelbase was shortened to improve the driveline angle/clearance and weight distribution.

"Mopar worked with the NHRA -- the world's largest and loudest auto racing organization -- to approve our race-prepped Challenger for drag race competition," said Sunil Lahoti, Senior Manager -- Mopar Marketing and Brand Strategy, Chrysler LLC. "Engineered to race, our Package Car has what an NHRA drag racer needs to thunder down the strip in competition. It's made for straight-line, drag-strip acceleration -- and is prepped to score victories off the Tree."

Drag racers will have a choice of three engines to power the Challenger Drag Race Package Car for race competition. Mopar will build a minimum of 100 Package Cars to meet NHRA requirements. Each will carry an identification plate with sequential serial number.

Mopar built the first two Challenger Drag Race Package Cars for development and testing. Each Package Car ran successfully in June as proof-of-concept and for NHRA certification.

At the Mile-High reveal, Mopar will announce details including vehicle modifications, engine options, NHRA/IHRA categories and class eligibility, pricing, availability and distribution. A build book/owner's manual will be available as well as a collector's "coffee table" book.